Small oversights when dismissing consultants can prove costly
Thursday, 21 May 2015 10:48am
Paying close attention to every detail when dismissing consultants will help recruitment companies avoid the "very small error" that has landed one agency in court, warns a lawyer.
A former employee of national staffing company Protech Group recently received leave to proceed with an unfair dismissal claim, after the Fair Work Commission found an incorrect date on the worker's termination notice and reference resulted in her filing the claim outside the 21-day time limit.
Hynes Legal associate director Kristin Ramsey told Shortlist the case reinforces the importance of "dotting the I's and crossing the T's" during terminations.
"Dates are always important in any matter... Dates of meetings, or dates that warnings are given, or dates that notices of termination are given, termination dates, commencement dates – in all of those things, inaccuracies could definitely cause issues in subsequent litigation, and it's hard to predict what issues it might cause, but here's a very real and recent example of where getting it wrong certainly made quite a big difference, because if they hadn't have made those mistakes it's very likely this employee would not have been allowed to continue with her unfair dismissal claim," she said.
"It's very unfortunate for Protech that they made that error with the date, and what looks on the face of it – and from their perspective – as a very small error will ultimately be costly, because my assessment of the matter is that this employee will be successful if she continues in her unfair dismissal case because of the fact that procedural fairness wasn't afforded to her."
The company was operating on the basis that the employee had worked there less than six months and therefore wasn't eligible to claim unfair dismissal, Ramsey said.
"They hadn't taken into consideration that her prior service with one of their related entities would be counted as service with them, and that put her over the six months' continuous service length," she said.
"A lot of businesses say, 'well, look the person's not performing. We're in the first six months. We haven't given any warning but that's okay, because we're not exposed to an unfair dismissal claim, so we'll press ahead with our termination', knowing that there's not a lot that the employee can do about it.
"But in this case, the employee had worked for one of their related entities and there are provisions in the Fair Work Act that say when you've worked for employers that have a relationship then the service with all of the entities is treated as service with that final employer."
In order to protect their businesses against similar legal risks, Ramsey recommends recruitment company owners take the following steps prior to dismissal:
- Raise issues early – "This was a termination for poor performance. They would have to, first of all, raise what the performance issues are with the employee and make sure that they can give them some very specific examples of what it is that the employee isn't doing and what it is that the business needs them to do going forward";
- Give a warning – "What I find is that businesses might think they've given a warning but they've never actually used that express word. So to give an effective warning, the warning should first be in writing, ideally, and needs to say something like, 'this is a warning. If you don't take A, B and C steps, it is likely that your employment is at risk and may be terminated in the event of future poor performance'";
- Afford time to fix the issue – "[Give] the employee time to improve their performance and tools to improve their performance, if that's relevant... The person might need some additional training or additional support";
- Provide a chance to respond – "You need to give the employee an opportunity to respond to what the reasons are that you're looking to terminate, and some people could refer to this as a bit of a time where you're asking the employee to show cause... as to why their employment shouldn't be terminated";
- Check the employee's circumstances – "[Make] sure that, from an unfair dismissal perspective, there's nothing particular to the employee that might render a dismissal harsh or unjust, even though you have a good reason for terminating and you followed a proper process"; and
- Afford them access to support – "The final thing to think about is to make sure that throughout all of the meetings and discussions that you're having with the employee in the lead up to termination, that you've given them an opportunity to have a support person present... should they wish to have such a person there to assist them".
Unique risks for SME recruiters
SME recruitment companies that lack dedicated HR resources also face unique risks when it comes to dismissal, said Ramsey.
"That area of risk can be combated by making sure that someone in the business is attending training and education in relation to performance management and termination of employment so that there's someone... who knows what the business's obligations are," she said.
"Other things that could be done are to put in place policies and procedures that have been prepared by someone who does know what the process should be and then following those processes and procedures."
It can also be helpful to follow a termination "checklist" with a series of steps that must be crossed off prior to dismissal, Ramsey said.
"It can be a very simple document that's just a series of checkboxes. Have we given a warning? Have we done this? Do we have a copy of this?" she said.
"The other thing that SMEs in particular should do is to get [legal] advice if they're not sure. So [they should] assess the risk before they press the button on the termination and, if they think it looks like a matter that's a little bit unusual or they're not sure whether they have substantial grounds to terminate, they should get advice."
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